Factors Affecting Consumers’ Potential Willingness to Pay for Organic Food Products in Iran: Case Study of Tabriz

Abstract

In recent years, about environmental and health issues related to food products have risen; consequently, demand for organically grown products has increased. In this respect, aim of this study was to investigate factors affecting potential willingness to pay premium for organic food products in Tabriz, Iran. An Ordered Logit regression model was applied to obtain value of willingness to pay and determine factors affecting it. Survey results showed that about 95 percent of respondents were willing to pay a premium; while about 10 percent of them were willing to pay more than 35 percent premium for organic food products. Results revealed that factors like individual’s income, dimension, “environmental concerns and wholesome diet, besides the general criteria of shopping, and consumers’ awareness of these products’ characteristics significantly increased willingness to pay a premium. According to results, married respondents as well as females were willing to pay a premium. In addition, those who had children younger than 10 years old, elderly, or people with family members having special disease were significantly willing to pay a premium price for these products. More than 80 percent of consumers mentioned absence of certifications and organic labels, lack of advertisement, and higher prices as their most important problems in purchasing organic food products.